New Delhi, Sept. 17: Stung by yesterday’s Supreme Court judgement that stalled the privatisation of Hindustan Petroleum and Bharat Petroleum, the government is mulling a single legislation which will allow it to disinvest its stake in state-run companies that have been set up or nationalised through separate acts of Parliament.
The verdict has obviously made the government apprehensive, and the BJP leaders believe that the ruling can be cited to scuttle divestment in any public sector unit set up through acts of Parliament where there are similar provisions on government ownership.
The new law being thought of will do away with the crucial clauses in these nationalisation or establishment acts which envisaged that the government or one of its agencies would hold principal stakes or exercise managerial control in these companies in perpetuity.
The more cumbersome alternative before the government is to introduce a repeal bill every time it seeks to sell a public sector unit set up or nationalised through an act of Parliament.
There are three kinds of PSUs: i) firms that have been set up under the Companies Act 1956, ii) units which were set up through acts of Parliament, and iii) privately-owned companies which were nationalised through legislation.
“The problem is that each of these acts was drafted at different times and contained slightly different provisions. Some had explicit wordings which forbade private ownership while some had implicit wordings. We have before us legal minefields, which will be difficult to negotiate without a general repeal law,” officials said.
Those companies that were set up either through the Companies Act 1956 without reference to Parliament or where there are no specific or implicit wordings which force the government to be the perpetual owner can be disinvested.
The problem with the new legislation lies elsewhere: while the government has the requisite majority in the Lok Sabha to get the proposed bill passed, the picture is different in the Rajya Sabha. There the Congress Party holds fort and the bill may fall flat on its face.
If the act is treated like a money bill then the approval of the upper house is not mandatory. However, in case it is not treated as a money bill, the new legislation can be stalled by the elders. In such an eventuality, the government will either have to strike a compromise with the Congress or else call a joint session of both the houses where the bill may scrape through because of the government’s overall strength in Parliament.